As the COVID-19 pandemic first swept across the nation last spring and communities went into lockdown, businesses in all industries rushed to digitally transform themselves in order to continue serving their customers through digital channels and support remote workforces. Even heavily regulated industries – such as financial services – acted quickly. Banks rushed to adopt new technologies such as biometrics, digital identity verification, remote online notarization and more to modernize their processes and ensure that Americans could continue accessing their money during this critical time.
However, this rush to digitize processes and services exposed vulnerabilities in our financial system and its underlying technology infrastructure. Cybercriminals and fraudsters saw the trillions of dollars in economic stimulus, expanded unemployment benefits and pandemic relief funds being poured into the financial system as a boon. They swooped in to get their piece of the pie and as a result, fraud surged. Cybersecurity attacks aimed at the financial sector increased 238% during the pandemic, account takeover fraud has grown 72% and banks have reported a seven-fold increase in suspicious business loan activity. In September 2020, in a presentation at the Fed ID Forum, the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCen) outlined how criminals exploit weaknesses in identity to commit more than $1 billion in cybercrimes each month. Numerous state governments were hit by massive fraudulent unemployment claims to the tune of $36 billion in 2020, according to USA Today.